Q1 2023 Earnings Conference Call


spk01: Greetings and welcome to the E-DAP TMS first quarter 2023 earnings conference call. At this time, all participants are on a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, John Francis of LifeSciAdvisors. Thank you. Please go ahead.
spk00: Good morning. Thank you for joining us for the EDAP TMS First Quarter 2023 Financial and Operating Results Conference Call. On today's call, we'll hear from Ryan Rhodes, Chief Executive Officer, Francois Adich, Chief Financial Officer, and Ken Mobik, Chief Financial Officer of the U.S. Subsidiary. Before we begin, I would like to remind everyone that management's remarks today may contain forward-looking statements, which include statements regarding the company's growth and expansion plans. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in such forward-looking statements. Factors that may cause such a difference include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission. I would now like to turn the call over to EDAP's Chief Executive Officer, Ryan Rhodes. Ryan?
spk03: Thank you, John, and good morning, everyone. I will start today's call by providing highlights from the first quarter of 2023 and then turn the call over to Ken Mobeck, our US CFO, who will then present the corresponding details of financial performance. After reporting a record fourth quarter, I'm pleased to note that our strong business execution has continued into 2023, reporting our strongest ever first quarter revenue performance. In Q1 2023, we recorded revenue of 14.8 million euros or 15.9 million U.S. dollars, which is a year-over-year increase of 13.8% over the first quarter of 2022. Focal One robotic HIFU sales continue to drive our strong top-line performance. During this last quarter, we were successful in placing seven Focal One units, including six equipment sales and one operating lease. One of the noted placements included UCLA Medical Center located in Los Angeles, California. With the addition of UCLA, we have now placed focal one robotic HIFU systems at each and every University of California academic teaching hospital. In addition, last quarter we placed our first focal one systems in the states of Minnesota and Tennessee, reflecting our expanding and growing geographical presence across the U.S. Lastly, we placed a focal one system at Santa Barbara Cottage Hospital, and we also placed our first focal one system at a Kaiser Permanente Hospital. As market demand for focal one high food technology continues to grow, we are pleased to note that more community hospitals are adopting our technology. Not surprisingly, the leading academic urology focused hospitals were amongst the first adopters of Focal-1 robotic HIFU. We now see a growing interest in Focal-1 technology and large community urology practices, indicating market demand is likely to increase as we further penetrate this key target market segment. An account like Kaiser, which is a leader in integrated managed care, further validates that HIFU is part of a comprehensive approach to prostate cancer care. We believe that the continued expansion of FOCA-1 robotic HIFU amongst academic medical centers, community hospitals, and integrated health systems demonstrates the value that this treatment option provides in any care setting for the most common cancer amongst men. As noted on prior calls, a significant increase in CMS reimbursement for hospitals performing a FOCA-1 procedure went into effect at the beginning of 2023. More favorable ROI economics compel hospitals to invest in FOCA-1 HIFU as a necessary treatment option for a subset of their patients diagnosed with prostate cancer. We expect this dynamic to help us maintain momentum throughout 2023 and beyond. Going forward, we also anticipate continued reimbursement expansion from commercial payers who often follow CMS's lead in determination of policy. While more favorable reimbursement is clearly an important factor in providing access to focal one HIFU technology, we also believe that generation of high-quality patient data and treatment outcomes through rigorous clinical studies is an integral part of driving long-term demand for our robotic HIFU technology. During the first quarter, we announced positive results from two clinical trials and studies, one in endometriosis and the other in prostate cancer. The principal investigators for both studies were well-recognized key thought leaders from leading international academic centers. We were pleased to note that the results from each trial clearly underscore the safety, efficacy, and additional symptom and quality of life benefits of Focal-1 HIFU therapy. The Endo-HIFU R1 Phase II study evaluated the safety of therapeutic HIFU for the treatment of rectal endometriosis, which results reported in January. Of 60 patients evaluated, 96.7% demonstrated positive safety with no or non-significant Clavian 1 adverse events. Only 3.3% presented Clavian 2 complications and zero patients presented Clavian 3 complications. A broad range of debilitating symptoms associated with endometriosis improved for the focal one group, as did almost all evaluated quality of life-based criteria at one, three, and six months. MRIs were performed at six months, also demonstrated a significant reduction of lesion volume. To confirm the positive results from the phase two study, we plan to initiate a phase three study in the second quarter of this year. As a level one study, we anticipate this being a multi-center, double-blind, randomized controlled clinical trial enrolling approximately 60 subjects across eight centers in France with 30 subjects randomized to each group. The primary efficacy endpoint will be acute pelvic pain three months post-procedure. If results from this phase three study are similar to the phase two results, EDAP would have the strongest clinical evidence to date demonstrating the utility of therapeutic HIFU to address this painful and debilitating condition. Based on the results thus far from this program, we believe Focal-1 HIFU could become an important new treatment option that would allow women suffering from deep infiltrating endometriosis to avoid the significant comorbidities associated with highly invasive surgical resection of the bowel or rectum. Now let me turn to some very exciting clinical data that we recently announced at the 38th Annual Congress of the European Association of Urology. Results from the largest multicenter non-inferiority study ever conducted to prospectively evaluate HIFU against radical prostatectomy as a first-line treatment for patients with localized prostate cancer demonstrated a salvage treatment-free survival rate at 30 months of 90.1% in the HIFU-treated arm as compared to 86.8% in patients who underwent radical prostatectomy. Investigators found that the risk of salvage treatment was greater than 1.2-fold higher after radical prostatectomy than with FOCAL-1. Furthermore, ICS scores as a measure of urinary incontinence were significantly lower after FOCAL-1 HIFU, and IIEF scores as a measure of erectile function decreased significantly less after HIFU than after radical prostatectomy. This is even more remarkable considering the FOCAL-1 treated patient group was on average 9.6 years older than the radical prostatectomy patients. Together, these two studies provide further clinical evidence supporting the efficacy of Focal-1 HIFU, enabling patients to maintain a higher level of baseline functionality while demonstrating good oncologic outcomes. Following our strong showing at the EAU meeting, our momentum continued into this year's American Urological Association meeting held just a couple of weeks ago in Chicago, where feedback and enthusiasm for focal therapy from attending urologists and other thought leaders was universally very positive. AUA is widely recognized as the largest meeting of academic and practicing urologists globally, also attracting a large number of investors and research analysts with a defined focus in showcasing the latest advances in urologic medicine. This year, EDAP had its largest AUA presence ever. Several plenary presentations and instructional courses were delivered by leading academic urologists showcasing FOCAL1's ability to meet accepted oncological standards for the management of prostate cancer while preserving sexual function and urinary control. Of particular interest was the FOCAL1 scientific abstract presented by the prestigious Martini Clinic in Hamburg, Germany. The Martini Clinic has the largest prostate cancer treatment program in the world. The AUA abstract presented by the Martini Clinic highlighted seven years' experience utilizing FOCAL-1 high-intensity focused ultrasound in 164 patients with prostate cancer. All treatments were established as primary therapy and monitoring definitions followed a very strict protocol. The oncologic outcomes showed excellent cancer control with only 7% significant infield recurrence and 91.5% radical treatment-free survival at seven years. On the functional side, very few complications were reported with 91.5% of the patients maintaining their baseline urinary continence and 85% maintaining their baseline erectile function. These results were impressive as we continue to further educate clinicians, patients, and providers on the benefits of FOCAL-1 robotic HIFU. Additionally, throughout the AUA meeting, EDAP was very busy giving numerous customers the hands-on ability to use focal one in a simulated prostate ablation procedure. They were able to see in action the robotic positioning system, advanced imaging, and fusion capabilities while setting up a prescribed ablation treatment plan. To further drive FOCAL-1 awareness and recognition, in April we held a live global procedure broadcast featuring a FOCAL-1 HIFU treatment performed by Dr. Andrea Brew and Dr. Amir Labachi, both who are assistant professors of clinical urology at Keck Medicine of the University of Southern California. USC also happens to be the first U.S. hospital institution to acquire and adopt EDAP's robotic HIFU technology. This patient procedure broadcast enabled us to demonstrate the many important features and benefits of our robotic HITHU technology platform to physicians, clinicians, and investors from around the world. I'd now like to briefly discuss our exciting ExactView 29 megahertz micro ultrasound system developed for targeted biopsies in prostate cancer. XactView's proprietary technology allows urologists unparalleled visualization of prostate ultrasound images, thus leading to the real-time detection of suspicious areas necessary for performing precise prostate biopsies. In the first quarter of 2023, we sold eight XactView units. Operating at 29 megahertz, the platform can generate micro-ultrasound resolution that is comparable to MRI. with a 300% improvement over conventional ultrasound technology. In April, we announced that ExactView received commercial approval from Japan's Pharmaceutical and Medical Devices Agency. The Japanese market is the second largest global market for advanced medical device technology with prostate cancer as the most common cancer diagnosis in Japanese men, with over 100,000 new prostate cancer cases diagnosed annually. We have an existing strong presence of urology devices in Japan, and now with adding the revolutionary micro ultrasound technology, we have the ability to significantly expand our business in the country. Before I turn the call over to Ken to review our financial performance in the last quarter, I just want to again acknowledge our strong cash position, which is a critical factor given the broader weakness in the capital markets. We ended the first quarter with and 58.3 million euros, or 63.4 million US dollars. Maintaining a strong balance sheet enables us to make the necessary investments to fully maximize the opportunity for Focal One, ExactView, and our broader portfolio of innovative technologies. As our sales pipeline continues to expand, it is becoming increasingly evident that the investments in our key technology platforms and commercial activities are helping drive demand in the market for our product offerings. With that, I will now turn it over to our U.S. CFO, Ken, to discuss the financials. Ken?
spk02: Thank you, Ryan, and good morning, everyone. I would like to start by thanking our global cross-functional teams who executed with dedication to deliver a solid first quarter of 2023. Please note that all figures except for percentages are in euros. For conversion purposes, our average euro-dollar exchange rate was 1.0777 for the first quarter of 2023. Total revenue for the first quarter was 14.8 million euros, an increase of 13.8% as compared to 13 million euros for the same period in 2022. and a record level for a first quarter. Looking at revenue by division, total revenue in the HIFU business for the first quarter was 5.3 million euros as compared to 3.8 million euros for Q1 2022. The 37.5% increase was driven primarily by six FOLCO I units sold in the first quarter versus four units sold in the first quarter of 2022. Total revenue in the litho business for the first quarter was 2.8 million euros, as compared to 2.2 million euros for the first quarter of 2022. The improvement was driven by four lithotripsy units sold in the first quarter, as compared to one unit sold in the first quarter of 2022. Total revenue in the distribution business for the first quarter was 6.8 million euros, as compared to €7 million for the first quarter of 2022. The slight decrease was driven primarily by eight exact few units sold during the first quarter as compared to nine units sold during the first quarter of 2022. Gross profit for the first quarter was €6 million as compared to €5.8 million for the year-ago period. Gross profit margin on net sales was 40.8% in the first quarter, compared to 44.3% in the year-ago period. The decrease in gross margin year-over-year was primarily due to investments in our service and clinical application support organizations in the US. Operating expenses were 12.6 million euros for the first quarter, compared to 5.9 million euros for the same period in 2022. The significant increase in operating expenses was mainly attributed to the planned build out and expansion of the U.S. commercial team, as well as non-recurring expenses that were linked to the CEO transition and succession plan we announced at the end of March. Operating loss for the first quarter was 6.6 million euros compared to an operating loss of 0.1 million euros in the first quarter of 2022. Excluding the impact of non-cash share-based compensation, operating loss for the first quarter would have been 3.9 million euros compared to an operating profit of 0.5 million euros in Q1 2022. Net loss for the first quarter of 2023 was 7.5 million euros or 0.2 euros per diluted share as compared to net income of 0.4 million euros or per diluted share in the same year-ago period. As Ryan mentioned earlier, total cash and cash equivalents amounted to 58.3 million euros or 63.4 million in U.S. dollars at the end of Q1 as compared to 63.1 million euros or 67.5 million in U.S. dollars at the end of 2022. Those are our financial highlights for the first quarter of 2023. And with that, I would like to turn the call back to Ryan. Ryan?
spk03: Thank you, Ken. In summary, our strong first quarter results demonstrate that our efforts and strategies are proving effective. The improved reimbursement landscape is having an impact, and we believe FOCA 1 HIFU is fast becoming a necessity to offer prostate cancer patients in the management of their disease. Based upon the results to date and the positive feedback from urologists, particularly at this year's recent AUA meeting, we have every reason to anticipate continued strength throughout 2023. We want to again recognize and thank the entire EDAP team and the pioneering clinicians and their patients who seek the benefits and value in embracing FOCA-1 HIFU as an appropriate treatment choice. I will now turn it back over to the operator for questions. Operator?
spk01: Thank you. The floor is now open for questions. If you would like to ask a question, please press star 1 on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Once again, that is star one to register a question at this time. The first question today is coming from Joseph Downing of Piper Sandler. Please go ahead.
spk07: Hey, guys. Good morning. You have Joe on here for Jason Bednar today. How has the Volcker 1 utilization been trending in 1Q following the reimbursement of coding, and what's the right way for investors to be thinking about utilization levels over the balance of the year, particularly as procedure volumes recover across the healthcare landscape?
spk03: Yeah, so we've stated before on a trend basis, Q1 is certainly favorable. We continue to see double-digit growth, though we don't share our exact numbers. So directionally, we're seeing... The benefits of the reimbursement change that went into effect January, we're again monitoring this very closely. And remember also, we also added last year our regional clinical manager team and applications team. So they're part of the process of driving hospital-based utilization. So again, we're trending favorably and we are excited about the momentum in the market, and we continue to monitor it on a daily, weekly, monthly, and quarterly basis.
spk07: Great. Thanks, Ryan. And then I think you mentioned on the previous call that there wasn't much in the way of a broad hesitation to purchase capital equipment. Just wondering if there's any update on how the capital equipment environment is shaping up amongst your hospital customers, and is there any distinction being made between buying patterns from, say, some of the larger versus some of the smaller hospital customers you serve?
spk03: Yeah, I think from my vantage point and how we look at it, it seems to be pretty consistent. Depending on markets, there are some pressure, I think, in some institutions. But I think where we have been effective is obviously we've talked about reimbursement and that change. But adding focal therapy to your prostate cancer treatment options for an institution is is really strategic in nature. It's not an operational investment. So centers that understand that, you know, this is anchored in cancer. It's anchored in the number one cancer diagnosed in men. It's also tied to men's health initiatives typically found in hospital institutions. So we continue to work through the processes as noted. We do see more interest coming from community hospitals. We work both academic centers and community hospitals in tandem. And I think some of the benefits of reimbursement have played into making the decision to invest in acquiring focal one robotic high food technology. So we're excited to see the engagement. And as mentioned, we've hired more salespeople. So I think we're getting more touches out in the market.
spk07: Perfect. Thanks, Ryan. And one more, I appreciate the updates on the phase three. Seems like no change there for rectal endometriosis. I'm wondering if you could update us on where some of the clinical work sits and some of the other indications you're pursuing, particularly for BPH. What are some reasonable timelines or milestones you're expecting there? And are there any other indication expansion we should have on our radar?
spk03: Yeah, so we've socialized the activity on BPH, really being more a focus on feasibility study work we're doing in Europe. We're going to broaden that in some regards. We have a plan to do that. But a lot of that work is being done currently in Europe, and we'll look for a strategy more specific to the U.S. over time. Again, we have a lot of strong users in Europe, as you can imagine. And many are participating in some of the early feasibility work that we're doing. And as we move forward, we'll look to expand that at some point with U.S. sites. But again, we're still early in our feasibility work, and we're continuing to make progress as planned. Nothing else that I can speak to about other indications other than what's been already mentioned with endometriosis.
spk06: Great, really appreciate the updates. Thank you, Joe.
spk01: Thank you. The next question is coming from Mike Zarconi of Jefferies. Please go ahead.
spk04: Hey, thanks, and thanks for taking my question. So just to start, can you elaborate a little bit more, Ryan, on the sales funnel and maybe just give us an update on you know, how conversations went at AUA and maybe the new leads that you generated post that conference?
spk03: Yeah, Michael, we had a real strong showing, as mentioned, at AUA, strongest showing ever. We were large, we were prominent, and we had even added some presentations in our booth throughout the meeting. So, you know, we brought our whole capital team there, so we had everybody on board. The engagement, I would say, was very high. For some customers, they were already in our pipeline and we're moving them through that sales pipeline. But we also had notable new touches from new hospitals. And so I think as we've continued to make progress in growing our install base, others realize that focal therapy is a necessity and hospitals need to answer to that. And when they answer to that, the question is, what technology do they answer with? And that's where I think we've been strong in our showing and being able to, there at that meeting, actually give hands-on procedural simulations of a focal one treatment. We did that throughout the meeting. We also used and showed our 29 megahertz micro ultrasound product, ExactView, So we had more than one product to talk about. But I would say overall, the engagement was very high. There were some notable presentations given. And again, as we've added recent headcount to our sales team, we had everybody there who was available to really take advantage of AUA and our strong showing. So I think our pipeline continues to build. It's the strongest it's ever been. And we continue to add new accounts into that active pipeline.
spk04: Okay, thanks. That's really helpful. And, you know, I would love to also hear just, you know, what kind of turnout you got for the live procedure in April and, you know, maybe the conversations and the level of awareness you're seeing post that live procedure.
spk03: Yeah, so we had a couple hundred folks log on for the live event. And again, we still see people going back to watch the replay. So I think it exceeded our expectations. We also had representatives from all over the world. So it wasn't just from the U.S. So we had promoted that on a global basis and saw many physicians from the extended OUS markets also watching the live broadcasts. And again, it was very well received. I think people really had a better understanding of how our technology works, how it's very efficient. They got to see all the benefits that we typically describe, the robotic positioning system, the contouring capability in Focal 1, the speed of treatment, which is notably something that we discuss with many of our customers because we have a very efficient way to ablate prostate tissue. So again, it was a very good showing for us and we still see customers continue to log on to watch it for educational purposes or just to better understand the technology.
spk04: Okay, great. And then just one more for me, maybe for Ken, how should we think about OpEx spend through the rest of the year?
spk02: So for OpEx this year, we should continue to see it grow a little bit quarter over quarter as we continue to invest in both the commercial infrastructure to help build out the business here in the United States.
spk06: Okay. Thanks a lot. Thanks, Michael.
spk01: Thank you. The next question is coming from Sean Lee of H.C. Wainwright. Please go ahead.
spk08: Good morning, Ryan, Ken, and thanks for taking my questions. My first one is on the upcoming slide phase three study. Could you provide a bit more color on the design of the study and also whether there are any changes in terms of patient selection and treatment compared to the previous phase one, two?
spk03: Yeah, so you're referring to the endometriosis study. Is that correct?
spk08: That's correct, yes.
spk03: Yeah. So the phase three study, as mentioned, it'll be 60 patients. This is a blinded study, so half of those patients will be subject to an ablation of their endometrial implants, and the other half will be part of a sham, non-treatment arm study. So, again, I think this being a more stricter study in terms of protocol and design will really allow us to show with increasing evidence the value of being able to ablate endometrial implants of the rectum for women suffering from deep rectal endometriosis. So, again... We're working closely with the center and enrolling patients as we're speaking now because we're in Q2. And again, we're excited about the momentum, I think, and the interest. And we'll continue to work closely with our lead site as we enroll more patients and treat more patients.
spk08: Great. Just a quick follow-up. Considering that the site sites are all in France, Do you believe that the results of this study could be used to support approval in the syndication in the US as well?
spk03: Yeah, Sean, that's a great question. Yes, we would want to use that data. One of our goals we've socialized is getting in front of the FDA this year for a pre-submission and really get a further understanding of what the acceptable data they'll be looking for. But I think that data would be very useful. from all the studies we've done, certainly the more recent one we're working on, but also the Phase 2 study that we had already completed. So, you know, we'll have to see what the FDA's response will be, but our goal, yes, would be to use that data where needed to make a case for a new indication in the U.S.
spk06: Great. Thanks for that. That's all you have. Thank you, Sean.
spk01: Thank you. The next question is coming from Frank Takanan of Lake Street Capital Markets. Please go ahead.
spk05: Hey, thanks for taking the questions. I was hoping that we could revisit placement expectations for the year. Clearly a strong start with seven this year. Looking back at last year, it's obviously a much more volatile macro environment, so a little bit hard to take away any meaningful insight from the placements. sequential cadence from last year, but maybe could you just speak to, generally speaking, if we should be getting back to a more normalized seasonal pattern of Q1s normally the lightest and Qs 2 and 3 a little bit better, maybe some lightness in Q3 due to OUS seasonality and then Q4 being the strongest. But we're just hoping you can kind of put some guideposts around placement expectations for 2023.
spk03: Yeah, so, you know, Frank, I would look at it kind of similar to what you had referenced. Certainly, you know, coming off of Q1, we're continuing to see some momentum in the market. But again, hospitals buy on their own timelines. So it's sometimes hard to predict, again, if a deal gets done in a particular quarter or moves out a quarter. I would say on a directional basis, I think we would expect to see anticipated growth, similar to what you referenced, Q2 being a quarter that would be certainly positive over prior year. Can't give you exact numbers, but also, as mentioned, you walk into Q3 and you see sometimes a slowdown, especially in OUS markets and sometimes in the U.S., and then you come out come out of it in Q4, which is typically, you know, seasonally our strongest quarter, our strongest quarter for capital purchases. So I think we would follow along those lines in terms of how we would predict, you know, capital sales for the remainder of the year. As mentioned, too, and just answering a question, we did, you know, we've added some new capital sales executives, And our total sales team today is at about 19, both capital and clinical. We expect that number to jump by in a year to 38 to 40. So with that said, as we onboard more of those folks and have more touches and engagement, we anticipate continuing to build a strong pipeline of potential accounts.
spk05: Okay, that's helpful. And then my second question was actually going to be directly on that, the sales organization. So thanks for that color. Maybe if you could provide a little more color of expected hiring cadence throughout the year to get to 38 to 40. We think of that as a linear progression throughout the year. And then maybe just talk about the quality of sales reps you're attracting to the organization now.
spk03: Yeah, Frank, so I'd say the quality, you know, we're tapping into a higher quality segment of potential sales executives. And I think a lot of it is relevant to the story and we'll call it wins that we've had in the market already. I mean, I think people understand what we're doing. We, you know, right product, right time, right market. So I think quality obviously is always important, but I'm impressed with the recent hires we've made on the capital side and clinical side. But speaking to the cadence, the capital team will typically ramp faster because, you know, we're outselling capital. The clinical team will be hired as a result of those capital placements. So depending on the market, we would hire additional clinical folks. We would hire them as to where we place those systems. So they typically trail the system placements on some level. Obviously, a coverage model, you know, your largest MSAs or metropolitan statistical areas, we focus on those and or large metropolitan markets where there's a higher concentration of patients in hospitals. So I would just say we continue to interview and hire routinely, and we'll do that in quarters two, the quarter we're in now, three and four, and to hit our year-end goal of having a fully staffed team. But again, I think the capital folks will be hired before the clinical folks typically, and we'll make the necessary adjustments on an as needed basis. So we're excited to make those investments, and we're on our roadmap currently. We're on plan, and we'll continue to make those additional hires throughout the rest of the year.
spk05: Got it. That's helpful. And maybe last one for Ken. As it relates to the gross margin, how should we be thinking about that? Obviously, as HICU continues to become a larger portion of sales, that should naturally bring up that margin profile over time. But maybe just if you could throw some goalposts around gross margin expectations for the year, that'd be helpful as well.
spk02: Yeah, so... On the HIFU business, we should definitely, as we sell more HIFU during the year, that will definitely be accretive to gross margin. So we will definitely see margin tick up there. In our other businesses, particular distribution, we need to trend the mix of products. We did see distribution margin tick down a little bit just due to mix of product, especially in Japan. And then I think also on the U.S. front, as procedure volumes grow, okay, that will continue to also help aid to accrete of gross margins in the focal one space in the U.S. Okay.
spk06: That's helpful. Thanks for taking the questions, and congrats on all the progress. Thank you, Frank.
spk01: Thank you. At this time, I would like to turn the floor back over to Mr. Rhodes for closing comments.
spk03: In closing, I want to thank all who participated in today's call. We look forward to speaking with you in August on results from our 2023 second quarter earnings release. Thank you again.
spk01: Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

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